Bloomberg article: 20% gross margin and unlikely 5k 2012 target

ckessel · Sep 21, 2012

Teslaâ€™s Musk Sidesteps 2012 Model S Goal, Sees 20,000 in 2013 - Businessweek

20% is a new low for the margin and completely bailed on the 5k for 2012.

Tesla, which began building the luxury cars in June in Fremont, California, will deliver 20,000 of the sedans next year and achieve a gross margin of more than 20 percent, Musk said today in a Bloomberg Television interview on “In the Loop with Betty Liu.”

The company in July said it was confident of delivering 5,000 Model S cars this year. Musk wouldn’t comment on that goal today, saying that “I need to be very hesitant about talking about any near-term metrics for Tesla.”

AnOutsider · Sep 21, 2012

Sounds like he's just being cautious, but that IS a departure from the previous confidence.

ckessel · Sep 21, 2012

What was the previous margin goal? I thought it was 30%? I know in an earlier conference call Elon had called 5k a "soft" target for the first time that I'd heard and said what he wanted to be held to was 20k in 2013 and the 30% margin, that those were hard targets. Maybe it was 25%, but I know it was more than 20%.

If I'm giving benefit of the doubt, I suppose it could be a typo in the article or maybe 20% is the 2012 margin.

Todd Burch · Sep 21, 2012

I remember Musk saying he was hoping to have 25% margins.

How does 20% compare to other auto manufacturers?

Gross Profit Margin Rankings

Based on this, 20% is still pretty decent.

Norbert · Sep 21, 2012

Video of interview with Bloomberg:

Tesla's Model S Goal Is 20,000 in 2013, Musk Says: Video - Bloomberg

Doug_G · Sep 21, 2012

ckessel said:
20% is a new low for the margin and completely bailed on the 5k for 2012.

From that very article:

Along with starting production ahead of schedule in June, and producing at least 20,000 vehicles next year, the South African-born Musk said he’s confident of Tesla’s future profitability.
“The third thing is that we would achieve a gross margin in excess of 25 percent,” he said. “Of those three things, I stand by those.”

So Musk still said 25%.

ckessel · Sep 21, 2012

Doug_G said:
From that very article:
So Musk still said 25%.

Yea, saw (heard) that too. Good to see 25% is still the number and the article wasn't correct.

Todd Burch · Sep 21, 2012

So watching the video, Elon is still confident of 25% gross margins.

v12 to 12v · Sep 21, 2012

Todd Burch said:
So watching the video, Elon is still confident of 25% gross margins.

After comparing Bloomberg's statements, headlines and video it looks like they are running Elons words through the spin cycle.

Grendal · Sep 21, 2012

v12 to 12v said:
After comparing Bloomberg's statements, headlines and video it looks like they are running Elons words through the spin cycle.

They spiced it up to make it more controversial. She asked him three times if Tesla was going to ship 5000 this year and all three times he said "I'm not legally allowed to say." They spun it to sound like he was lacking in confidence. Knowing Elon there are just too many variables and something can still come up that slows production slightly.

She was also trying to start something between Virgin Galactic and SpaceX.

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Bloomberg article: 20% gross margin and unlikely 5k 2012 target

ckessel

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ckessel

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Todd Burch

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Norbert

TSLA will win

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